“The research examines the role of Development Financial Institutions in the Acquisition of Technological Capabilities in Small and Medium Enterprises (SMEs) in Kenya. Empirical research has shown that technological capabilities hold the key to competitive advantage of enterprises
globally. For the purposes of this research, we adopt Ernest et al (1994) who classifies technological capabilities into six areas: production, investment, minor change, linkage and strategic marketing
and major change capabilities. Since it is doubtful that many SMEs in Kenya do have all these technological capabilities, we only focused on the first three capabilities; namely, production,
investment and minor change capabilities. In this study, small and medium enterprises are defined as those employing one to 50 workers and having a capital investment up to Kshs. 5 million.
Our intention was to investigate how development financial institutions (DFIs) in Kenya have helped or hindered the acquisition of these technological capabilities in SMEs.”
